By Liane Langstaff
On October 23, 2018, the Government of Canada announced the next steps in its climate action plan and reaffirmed its commitment to apply a federal carbon pricing system (the “Federal Backstop”) in Ontario, New Brunswick, Manitoba and Saskatchewan in 2019. In so doing, the federal government has doubled
down on imposing carbon pricing across Canada.
WHAT IS THE FEDERAL BACKSTOP?
The Federal Backstop is the federal carbon pricing system for provinces without a cap and trade program or a tax that meets the minimum mandated federal requirements. The Greenhouse Gas Pollution Pricing Act sets out two mechanisms for pricing carbon under this federal system:
1. a charge on fossil fuels for fuel producers, distributors and importers; and
2. an output-based pricing system for industrial facilities.